How the Ukraine crisis is impacting SC economy
COLUMBIA, S.C. (WIS) - As Russian forces move to take control of Ukraine’s capital city of Kyiv, the effects of the crisis are felt here in South Carolina.
Economists say prices at the gas station and grocery store, along with a volatile stock market, are caused in part by the crisis abroad.
Charles Bierbauer, a former national correspondent stationed in Moscow, saw the effects of the Cold War and other conflicts firsthand.
This crisis, he says, is to be expected.
“What we’ve been experiencing in the Putin years is really a Russian desire--his desire, but one that equates to a Russian sense of power to try and bring back as much the Soviet Union as he is able to, and that’s where Ukraine comes in,” Bierbauer said.
Now, the invasion is part of the cause for price hikes. Research economist at the Darla Moore School of Business, Joey Von Nessen, says it’s difficult to pinpoint when the crisis began affecting the US economy, but there are multiple factors at play.
“On the one hand, we do have a steady increase in the price of energy because of consumer spending patterns changing and more demand. But on the flip side, we have the supply chain constraints coming in from the east, from Russia and Ukraine,” said Von Nessen.
In SC, the effects are felt most at the gas pump.
According to AAA, the current average gas price in the state is $3.43 per gallon. That’s up nearly $0.40 from last month’s average of $3.04 for regular gas. Last year, the average was $2.45 per gallon.
The cause, says Von Nessen, is a combination of demand, supply chain issues due to the Ukraine crisis and other factors, and the upcoming tourism season in SC.
“Add to that the crisis in Ukraine right now and what’s going on there, and that exacerbates the supply chain shortages that we see with respect to oil,” Von Nessen said. “It’s almost certain that we’re likely to see a continued upswing in gas prices for the foreseeable future, although over the long haul it’s really difficult to predict what the implications will be for Ukraine long term.”
Von Nessen says consumers should expect to see increased gas prices for the next few months, but this is considered a short-term issue. He adds that inflation caused by the crisis could spike upwards of 1% in addition to the inflation the US is already dealing with.
When it comes to the volatile stock market, economists suggest not making rash decisions based on one bad day in the market.
“I think just being conscious of the fact that a lot of volatility is what we’re going to be expecting this year, and not to panic for if we see any swing in the market in any particular day because that volatility is going to be the normal at least for the foreseeable future for 2022,” Von Nessen said.
Along with an unpredictable market, cybersecurity experts say it’s important to secure your online financial information as the US imposes more sanctions on Russia in case of a cybersecurity attack.
Ways to protect your assets include:
- Creating new, strong passwords
- Making sure your password for each account is different
- Keeping a close watch on your online banking and investment accounts
Bierbauer says the outcome of this Russian conflict is just as unpredictable as others he’s experienced.
“We just have to watch this and see what unfolds,” said Bierbauer. “The Ukrainians, all Russians themselves who thought that the past was passed and now the past is coming back.”
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